AstraZeneca, the Anglo-Swedish drugs group today agreed to pay £505m to the British tax authorities in a move that could have far-reaching implications for other UK multinationals.

The pharmaceuticals company agreed to foot the bill in a case that involves the complex system of inter-company tax accounting known as transfer pricing, which enables companies to book profits from a subsidiary in a high-tax area to one in a low-tax jurisdiction, minimising tax payments.

However, the authorities are increasingly clamping down on transfer pricing as part of an international offensive against tax avoidance that has the support of US president, Barack Obama.

Last year, electronics retailer DSG International faced a multibillion-pound bill after a tax tribunal ruled that it had breached guidelines, even though many aspects of transfer pricing are legal.

AstraZeneca is settling a case in relation to an issue that relates to a 15-year period from 1996 to 2010 and which was due to go before an independent tribunal after both sides appealed for arbitration.

The company said the payment settles a "long-running transfer pricing issue" with Her Majesty's Revenue and Customs, as well as other outstanding tax matters. Following the resolution, the group tax rate that AstraZeneca will pay this year will be about 2% lower than previously expected as the payment will reduce taxable profits. The group in turn raised its earnings per share forecast for this year from between $5.75 and $6.15 to $5.90 and $6.30.

AstraZeneca said it makes more than 70% of its profits overseas, and pays the necessary taxes abroad. However, the US arm of AstraZeneca was named in 2004 as one of 30 companies involved in a tax avoidance scheme sold by the US arm of accountancy firm KPMG. The scheme was estimated to have cost the US tax authorities, who called it "abusive", almost £1bn in lost revenue.

KPMG itself described the scheme, called CLAS – contested liability acceleration strategy – as "aggressive" and "risky", according to leaked internal documents highlighted in the Guardian last year. It was marketed as a scheme suitable for firms such as pharmaceutical companies, which often have outstanding lawsuits over the safety or efficacy of their products.

AstraZeneca said: "We draw a distinction between tax planning using artificial structures and optimising tax treatment of business transactions, and we only engage in the latter." The company denied any wrongdoing.

Accountancy firm PricewaterhouseCoopers said pharmaceutical firms face tax increases as governments crack down on avoidance at a time of rising public sector deficits. In a recent report entitled Taxing times ahead, PwC cited more aggressive measures taken by the Internal Revenue Service in the US and measures adopted by the Organisation for Economic Co-operation and Development to blacklist tax havens.

The firm said: "For the past 20 years, pharma has benefited from a benign legislative and commercial environment that has enabled it to report low and stable tax rates. These elements are changing."

PwC highlighted wide variations in corporation tax rates paid by large drugs manufacturers, ranging from 29.3% in 2008 for Bayer in Germany to as low as just 14% for Novartis of Switzerland.

Critics claim companies can reduce corporation tax rates by using transfer pricing, which sets the price at which one unit of a group sells goods or services to another unit of the same group in a different tax jurisdiction. Last year, it emerged that Google used a cross-border network of subsidiary companies to ensure it hardly paid any corporation tax on its £1.6bn advertising revenues in Britain. Such practices are legal, and Google said it made a substantial contribution in the UK via payroll and other taxes.

Richard Murphy of lobby group the Tax Justice Network has long been campaigning for multinationals to be obliged to undertake country-by-country reporting to reduce the opportunities for transfer pricing.

He said the practice costs the developing world at least £100bn in lost revenues – three times the cost of the millennium development goals.

Murphy added: "The UK has promised to take a lead helping developing countries obtain the benefits of transparency and accountability. Country-by-country reporting can deliver more in that respect than anything else and the UK seems to understand that."